FSL – BT

FSL Trust’s DPU for Q2 slumps 61%

DISTRIBUTION by First Ship Lease Trust (FSL Trust) fell 61.2 per cent year on year to 0.95 US cents per unit for the second quarter, as the trust sank into the red on an impairment charge following the re-delivery of two vessels.

FSL Trust posted a net loss of US$6.11 million for Q2 ended June 30, compared with a US$2.35 million net profit a year earlier.

This resulted from the recognition of a US$7.87 million charge after long-term charters for the vessels FSL Hamburg and FSL Singapore were terminated prematurely.

The trust’s Q2 distribution per unit (DPU) represents 33 per cent of generated net cash, versus a payout of 55 per cent for Q1.

FSL Hamburg and FSL Singapore were re-delivered in May by lessees Rovina Shipping Company and Messino Shipping Company – affiliates of Cyprus-based Groda Shipping & Transportation – after they cited cashflow problems.

The vessels were subsequently seized in China and Japan respectively on claims by Daxin Petroleum that it had not been paid for bunkers supplied to them.

The vessels have seen been released after FSL Trust posted bail for them.

FSL Trust has also sued Singapore-based firm Daxin, three individuals representing Daxin in that period and Rovina and Messino – which FSL Trust says are linked to Daxin – for damages suffered as a result of the arrests of the vessels. It also wants legal action against the vessels dropped and is seeking other forms of relief.

The two vessels will be traded in the product tanker spot market for now and may be locked into charters when the tanker market improves.

FSL Trust’s Q2 lease revenue rose 14.8 per cent year on year to US$28.5 million. But this includes a one-off US$6 million cash payment the trust received from the re-delivery of the two vessels. Stripping this out, revenue fell 9.3 per cent to US$22.5 million due to the premature termination of the charter agreements for the vessels.

FSL Trust’s units closed unchanged at 42 cents yesterday.